Being the pioneer airline to introduce the “LCC (low-cost carriers)” concept in Asia, AirAsia showed a great ability in perceiving the market environment and turn it into opportunities.
Considering micro environmental forces, it analysed carefully its potential customers which, after the 9.11 terrorist attacks in New York, were afraid of long-distance flights and created new demands by offering them affordable tickets and short trips to neighbouring countries. To succeed in carrying this strategy on, the CEO Tony Fernandes made out another essential factor: the company itself. According to Tony, every sector should be committed to work as a unified team with a collaborative attitude; he believed that encouraging a good relationship among his staff would effectively be translated in better results.
Two other micro environmental forces were also fundamental to AirAsia success: how it dealt with its competitors and suppliers. Noticing the lack of services from other airlines in the “low cost” field, it took over the new market with unbeatable prices “up to 60% in savings compared to the competitor” as mentioned in the article. To maintain its position, the company also built good partnerships with travel agencies and worked them out as a second-option selling channel with complementary purchasing conditions for customers without credit card, for example. Consequently AirAsia expanded its reach and kept increasing in the market.
The macro environment factors that have influenced the strategy developed for AirAsia are mainly economic, political and technological aspects. By the time Tony Fernandes´s airline was founded, the Malaysian population were passing over a “curious” moment; although a growing economy and rising incomes, the population couldn´t enjoy flying that much because of unaffordable prices practised for the national carrier.